IBM first entered the Indian BPO market in 2004 with its acquisition of Daksh. IBM now has BPO operatons in eight cities in India.

Many experts note that India will have to move higher in the value chain to maintain market share in the BPO market. As India raises its prices for BPO labor, the skill level and level of specialization also needs to rise. Knowledge and Analytics are the new focus in the India BPO sector now, but for the companies that are only offering grunt work, they need to increase their overall quality offering, otherwise less expensive countries will be likely to gauge their market share.

South Africa has recently announced that it will be having incentives to attract business process outsourcing cmpanies. These incentives could stimulate a rise of South African outsourcing that could pose a real threat to Indian BPO’s market share. The largest market share for outsourcing is currently in India. BPO’s springing up in other countries, especially those who have many who excel at English, will eventually cause India to lose its market share of the global market. Since the global market continues to expand, India’s total dollar value of outsourcing services is not expected to shrink.

Since many in South Africa speak English as their native language, and often have an accent that is similar to British English, they have a huge edge over countries where English is their second language. Another helpful factor for South Africa is that their time zone is very similar to England’s making it easy to make phone calls during business hours. Both the U.K. and South Africa also have a similar financial system. South Africa has been an untapped resource until recently for outsourcing, but they will be able to quickly gain market share and become the world’s fourth largest outsourcer behind India, China, and the Philippines.